New Delhi: The Narendra Modi government on June 29 approved the implementation of the recommendations of 7th Central Pay Commission (CPC) on pay and pensionary benefits.

It will come into effect from January 1, 2016.

The Union Cabinet in its meeting on June 29 accepted the recommendations of Justice A K Mathur headed 7th Pay Commission in respect of the hike in basic pay and pension but the decision on its suggestions relating to allowances has been referred to a Committee headed by Finance Secretary.

The Committee will complete its work in a time bound manner and submit its reports within a period of 4 months. Till a final decision, all existing Allowances will continue to be paid at the existing rates.

The Cabinet has also decided that arrears of pay and pensionary benefits will be paid during the current financial year (2016-17) itself, unlike in the past when parts of arrears were paid in the next financial year.

The recommendations will benefit over 1 crore employees. This includes over 47 lakh central government employees and 53 lakh pensioners, of which 14 lakh employees and 18 lakh pensioners are from the defence forces.

The new scales of pay provide for entry-level basic pay going up from Rs 7,000 per month to Rs 18,000, while at the highest level i.e. Secretary, it would go up from Rs 90,000 to Rs 2.5 lakh. For Class 1 officers, the starting salary will be Rs 56,100. Rate of annual increment has been retained at 3 percent.

The table below shows the new salary of central government employees fall under the pay band of Rs 15,600- Rs 39,100.